Microsoft's InTune: Too Expensive for Small Businesses?

Microsoft's
cloud-based Windows InTune gives IT administrators for midsize businesses an
enterprise-style level of control over a network, via a combination of cloud
services, on-site PC-management tools and added malware protection. Whether it
involves checking that software licenses are up-to-date, or diagnosing
unbootable PCs, the platform is supposed to be streamlined for those IT pros'
ease of use.
But is it the
right price?

One analyst
feels that InTune-one of Microsoft's first forays into broad cloud services for
businesses-might prove a little too dear for smaller companies' bottom line.
According to Microsoft's official Windows InTune page, the platform costs $11
per PC per month. The minimum subscription term is one year.

Yet based on a
Web survey he conducted for Microsoft to judge InTune's uptake among its
possible customer base, Endpoint Technologies Associates analyst Roger Kay concluded on his Forbes blog that "uptake at $11
would be limited." In addition, the company "is trying to bill for values, like
encryption management, not yet clear to the target market." (Kay disclosed in
the posting that his firm consults for Microsoft.)
Microsoft is
also bundling Windows 7 Enterprise upgrade rights with Intune, the better to
increase the business presence of Windows 7, on which the company still relies
for a major portion of its revenue. Kay's posting seems to focus on analyzing
InTune primarily as a channel for obtaining a Windows 7 license, as opposed to
a management service.
"At $11, the
customer's three-year cash outlay would be worth $396, far more than the list
price, $75, for Windows 7 Professional," he wrote. "Even discounting the value
of the stream of $11 payments at generous 5 [percent] yields, a net present
value of $182.02 over three years, [it's] more than twice the purchase cost."
Rather than
pursue that model, Microsoft should "view an Intune sign-up as a customer
acquisition ... and seek to raise the average revenue per subscriber over time."
By trying to "grab all the benefit on the front end," he concluded, the company
apparently limits its market penetration.
Kay's posting
doesn't mention his survey's sample size, but he does detail some other
concerns expressed by the survey's respondents: "Microsoft still has to answer
some pointed questions raised by respondents if it hopes for widespread
adoption ... For example, the fallback plan during loss of connectivity, whether
delivered through partners or directly, must assure potential subscribers."
On top of
that, a number of respondents allegedly claimed little knowledge about various
aspects of Intune's service, he wrote, "implying that Microsoft needs to [roll]
up its sleeves with respect to educating the target market." Such an
undertaking "must be well-financed, thorough and confident."
Microsoft has
been pushing its message hard on the cloud as a whole, and its cloud-based
services in particular.
"Windows
Intune builds on our history of delivering cloud services at scale, including
Hotmail and Windows Update, and leverages Microsoft's cloud experience with
Azure, Dynamics CRM Online and Office 365," Gavriella Schuster, a general
manager at Microsoft, wrote in a Feb. 28 posting on The Windows Blog.
Over the past
year, Microsoft has used its conferences and other events to push a particular
vision of cloud IT services for corporations, placing it in direct competition
with Google and Salesforce.com. Microsoft's bets on the cloud are decidedly
more long-term; despite the buzz surrounding services, such as Office 365 and
InTune, the bulk of the company's revenue continues to derive from traditional
streams such as Windows and Office.

Nicholas Kolakowski is a staff editor at eWEEK, covering Microsoft and other companies in the enterprise space, as well as evolving technology such as tablet PCs. His work has appeared in The Washington Post, Playboy, WebMD, AARP the Magazine, AutoWeek, Washington City Paper, Trader Monthly, and Private Air. He lives in Brooklyn, New York.